We got the news this morning that the jobless claims and added jobs report were better than expected for June, and a very tired market shot up off the opening bell. Going into tomorrow’s unemployment numbers, it seems like a pretty good time to take a shot with the ETF that double shorts the S&P 500.
The street is now expecting much improved numbers, but the numbers in the days leading up to the unemployment numbers don’t always match up together.
The indicators are screaming oversold and SDS is down 8 consecutive days. The Contrarian in me says it’s time, and so this morning I bought a couple hundred shares of SDS at 19.68. Just dipping my toes in the water so to speak, and more shares will either be purchased as SDS rounds into an uptrend, or I will take a small loss, as I set my stop loss to 19.18.
Here is the current chart:
Chart courtesy of stockcharts.com
Many traders wait for the stochastic to cross above 20, but the more aggressive trade is at the point where the fast and slow stochastic lines intersect.
Although the market was up nicely today, the last hour saw a bit of a sell off, and SDS finished the day only 10 cents below my buy price. This tells me that there are some traders who are wary of the jobs report, and may not want to be long going into tomorrow morning.
If the jobs report is good, I will probably get stopped out with a small loss. If it is as expected or worse, we may just get a sell off to end the week.
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